The author is very stupid. India's foreign exchange reserves are other people's money invested in India in the stock market, real estate and in deposits. The depositors can take these away if and when they would feel like. If India spends this money in future India would go bankrupt, as it would not be fulfil its obligation to the foreign investors. That would give a chance for US to buy up whatever is left after the great sellout in 1991 by Manmohan Singh. For the same reason China also cannot spend this money, but invested in US treasury bonds and in effect paying for the US government. India is doing the same. How US gets this dollar. It just print its own Dollar and buy anything it wants for free from the rest of the world. It puts some in India and India has give those back to the US treasury in exchange for Bonds. In the process US citizens gets dividends, interest payments and gains from the stock market in India for doing nothing. India gets ruined, as it needs to devalue Rupee continuously otherwise it cannot export. as a result import costs will go up. The only people who gain from this game are the US government and the US people investing in India. That is the reason they have forced India to open up its economy. Yes, it creates higher growth rate. But remember Thailand in 1997. In 1998 it went bankrupt.
RE:Foreign Exchange Reserve
by ASHOK on Apr 17, 2007 06:53 PM Permalink
I think you are wrong about saying stupid to the auther.
Great sell out was during Chandersheker Govt, perhaps Mohan Dharia was finance Minister.
Trend was reversed by Manmohan Singh as Finace minister in Narsimha Rao Govt.
Check back History if I am wrong. Also it has taken us 10 years to pile up first 100 Billion Dollar and next 100 Billion has come in 3 years 3 month. As such it is not a great amount, but it is not small enough to be left unattended. Author has done a good Job of accumulating the facts so far.
Much more than this amount is lying in US dollar for China / Japan & USSR
I believe India should not waste time any further and take decision to have couple of Nuclear plants,that to on turnkey as soon as Nuclear issue is resolved. Go far Better Roads. Encourage Indian Bussiness to buy more assets abroad. Consolidate India's postion in Industry outside India. Why should we send iron ore to China, if Tata can process it in Corus and employ more Indians abroad.
Or else Buy Running Oil platforms and start shipping more Crude to Indian shores.
10% stake in Sakhalin oil is not enough!So far Well Done India.
Accumulate another 100 Billion in 2 years now.
As we know india's Net import is higher than Net export of MANUFACTURED goods. But even than we pile up reserves as Indians are worlds largest Foreign exchange senders back home. Also All this service Industry in India, BPO / KPO etc does not contribute to actual physical manufacture. But with the money earned through this route goes into individuals hands and they want to spend it for improving their life style. That is where Indian system is worried, if they bring a part of this 200 Billion back home than they will have to circulate more INDIAN Rupees and that means more strain on Indian manufacturing sector. which is STILL not matching Indian Imports. Well solutions exists. We should not worry much, we know when elections are declared lot of black Money comes out and system takes the load.
